Balancing Priorities: Key Takeaways from Ontario Budget 2026
Today, Ontario’s Minister of Finance, the Hon. Peter Bethlenfalvy, presented the 2026 Ontario Budget: A Plan to Protect Ontario. This title is the same as that of Budget 2025, which primarily focused on addressing the impacts of tariffs imposed by the United States. Minister Bethlenfalvy mentioned that this year's budget aims to maintain the same trajectory by “building the province we want tomorrow and creating a more competitive, resilient, and self-reliant economy” in light of ongoing economic uncertainty. Many of the initiatives announced and celebrated in Budget 2025 have been included in Budget 2026, either as continuations or expansions.
Budget 2026 projects a deficit of $13.8 billion for the upcoming fiscal year, an increase from $12.3 billion the previous year and 77% higher than the original forecast. Despite government tax revenue being higher than expected, rising expenses - primarily from increasing health care costs - will lead to higher borrowing and debt service costs for the government. Interest on the province’s debt is anticipated to increase to $17.2 billion in the coming year.
In line with the Premier's commitment, there are no new tax increases in this year’s budget. However, the budget does include a significant rise in tariff-response spending, which has increased from an initial $11 billion in Budget 2025 to a cumulative $30 billion allocated for relief and support for affected workers and industries. Below are the most important items from Team Impact.
Key Measures
Healthcare
Ontario has proposed an additional $325 million to further expand primary care, resulting in a total investment of $3.4 billion aimed at connecting everyone in Ontario to a family doctor or primary care team by 2029.
Ontario is investing an additional $124.2 million over three years to support the expansion of 2,000 registered nurse and 1,000 registered practical nurse seats at colleges and universities. This funding ensures students receive vital hands-on clinical experiences.
Healthcare infrastructure included over $1.1 billion in additional funding for hospitals, along with $139.4 million for long-term care homes.
Ontario is investing $186 million in new funding for the Ontario Autism Program in 2026–27 to enhance services for children and youth on the autism spectrum, bringing the total investment to $965 million.
Housing
Ontario is proposing to temporarily remove the full provincial portion of HST for all buyers of new homes under $1 million, which, pending federal legislation, is poised to follow suit by waiving the federal portion. Once adopted by both governments, this partnership would provide almost $2.2 billion in total joint tax relief for housing in Ontario while delivering 8,000 new housing starts, 21,000 construction jobs, and an expected $2.7 billion in provincial economic growth.
Infrastructure
In its ten-year capital plan, the province has allocated over $210 billion for the construction of new highways, transit systems, and community infrastructure. This represents a slight increase from the $200 billion set aside in Budget 2025. Of this total, $37 billion will be invested in the coming year to support various initiatives.
The plan includes the widening and extension of highways such as Highway 413 and the Bradford Bypass, as well as a feasibility study for a tunnel expressway under Highway 401. These enhancements are intended to support regions experiencing high population growth. Additionally, essential road improvements will be made in Northern Ontario to facilitate new connections to the Ring of Fire. This effort includes renewing partnerships with First Nations to build and improve highway infrastructure, promoting equity, and enhancing connectivity for First Nation communities within the province's highway network.
Furthermore, existing corridors will be widened, including Highway 11/17 between Thunder Bay and Nipigon, as well as Highway 17 between Kenora and the Manitoba border. The province will continue to make progress on due diligence for highways across the region.
Energy
The nuclear expansion plan is expected to create over 150,000 jobs and add $800 billion to Canada’s national economy. Budget 2026 cites the Darlington Unit 4 nuclear reactor refurbishment completed ahead of schedule and $150 million under budget, a new agreement for the Wesleyville nuclear project, and approval for refurbishment of the Pickering Nuclear Generating Station as examples of its successful approach.
Innovation
Budget 2026 also introduced the Protect Ontario Account Investment Fund, through which the province will direct up to $4 billion to develop the “new economy”, enabling the growth of industries like artificial intelligence, defence, advanced manufacturing, life sciences, and the critical minerals sector. The Budget describes the fund as “structured to operate as a commercial market fund, with capital deployed by an independent, private-sector General Partner.”
Small Businesses
The government is proposing to cut the small business Corporate Income Tax (CIT) rate by over 30%, allowing small businesses to reinvest in their operations and grow. This proposed change could provide small businesses with up to $5,000 in annual tax relief by offering a preferential CIT rate, expected to benefit over 375,000 small businesses and provide an additional $1.1 billion in CIT relief over the next three years.
Ontario announced it will invest $5 million in 2026–27 in the Digitalization Competence Centre to help small businesses modernize and grow through the adoption of digital technologies.
Education/Post-secondary
The budget makes major long-term investments in education infrastructure, committing about $30 billion over the next decade to build new schools and expand childcare spaces. It also includes $95 million in targeted support for 2026–27 to improve student outcomes, including digital math tools, early reading programs, online learning, summer mental health services, and support for students with special needs.
While concerns remain about recent OSAP funding changes, the budget introduces a new postsecondary funding model that will add $6.4 billion over four years. This will increase annual operating funding to a record $7 billion (a 30% rise) and support 70,000 additional student spaces, with a focus on rural, Northern, Francophone, Indigenous, and smaller institutions as well as $6 million over three years to provide competitive scholarships for Ontario postsecondary students through the Queen Elizabeth Scholars program.
Tourism
Ontario re-affirmed its desire to expand Billy Bishop Airport. As previously announced, the province intends to bring forward legislation that would see it assume the City of Toronto’s current role in the tripartite agreement governing the airport, as well as taking ownership of City-owned land at the airport to support its future growth and expansion.
Ontario is investing $29 million over three years to support the Lakeview Village Cultural Pier Development project in collaboration with Mississauga, Peel Region, and the Lakeview Village group.
Opposition’s Response
Unsurprisingly, the Ontario NDP criticized Budget 2026 as a missed opportunity for the government to choose a "more affordable future" for the province. NDP Leader Marit Stiles stated, "Ontarians want lower rent and grocery costs, improvements to health care and education, affordable housing, and responsible spending. None of this was in the 2026 budget."
The Ontario Liberal Party Leader John Fraser stated “There are no new measures in this budget that are going to help families with affordability and their daily costs … Doug Ford and this government are tired and adrift."
What’s Next
In the coming months, the Ontario government will focus on implementing key budget commitments through legislation, consultation, program design, and funding, while releasing more details on priorities like primary care expansion, housing incentives, and infrastructure projects.
Additionally, certain measures, notably the proposed HST relief on new homes, will require coordination with the Government of Canada.
This period also offers an important opportunity for stakeholder engagement as the criteria for programs and funding mechanisms are finalized. Industry groups, municipalities, healthcare organizations, and community partners will be actively seeking clarity on eligibility, timelines, and access to funding. Early engagement is crucial, as ministries are more open to input during the initial stages of program development. Decisions made at this point will influence funding allocation and determine which sectors or regions benefit the most.
The next significant fiscal milestone will be the Fall Economic Statement, where the province is expected to reassess its financial projections and indicate any necessary adjustments.
Questions about how Budget 2026 will affect your organization, contact us at info@impactcanada.com
Sydney Robinson
Communications Associate